tut@sun.uucp (Bill Tuthill) (03/14/86)
Somebody asked for it, so here it is: a summary of Barron's recent report on mutual funds, which appeared 17 February 1986. The thrust of the article is that mutual fund assets have soared (with sales of $114.3 billion in 1985 versus $45.9 billion in 1984), but performance has not (all mutual funds averaged 27.17% in 1985, while the S&P 500 climbed 31.79%). This is the 10th straight quarter that mutual funds have lagged the market. This is to be expected, since funds impose a management fee that sooner or later detracts from overall return. The article includes some great tables taken from Lipper Analytical Services, an organization that tracks mutual funds. Unfortunately, Lipper figures are always oriented towards the calendar year or quarter, which effectively obscures real market cycles underneath. Quarterly results don't mean much, because a fund that does well this quarter will probably do poorly next quarter. So instead, here are the top 10 funds between 30 June 1982 (a month and a half before the start of the bull market) and 31 December 1986: million %change assets Hemisphere Fund 395.15 8.4 closed Fidelity Sel Financial 215.47 143.2 2% load 1% redemption Fidelity Magellan 212.85 4136.0 3% load Legg Mason Value Trust 197.91 421.7 1% hidden load Lehman Opportunity 196.45 87.4 no load Fairmont Fund 186.79 51.5 8.5% load Vanguard QDSP I 185.77 169.3 closed Putnam Int'l Equities 177.77 90.4 8.5% load Loomis-Sayles Capital 176.31 170.4 closed Quasar Associates 173.20 115.3 no load These funds have done well, but over a period that includes only one bear market, in 1984. Some of them (especially Loomis-Sayles and Quasar) are extremely volatile, and will probably suffer in the next bear market. I've never heard of the Hemisphere Fund, but since it's closed, I guess it doesn't matter. Bill Tuthill